Euro falls as investors get nervous. Fears of EMU break-up likely to be a hot topic over the summer. Chances of a break-up though negligible, but worries over outlook will increase pressure on ECB to cut rates.
* Issing quotes keep ECB rate cut hopes in focus
* Euro falls and term rates firm as investors get nervous
* Fears of EMU break-up likely to be a hot topic for markets though summer
* We think chances of generalised break-up are negligible but one or more countries departing
may be about a 5 per cent chance
* Drop in value of Euro reflects concerns about economic weakness and may have further to go
* Worries about outlook will increase pressure on ECB to cut rates
* Generalised Euro break won’t happen because economies would suffer dramatic ‘impact’ effects
* Protectionist measures would increase across Europe and investment would be hit. So, political
and economic glue holding EMU together strengthened by unattractive alternatives.
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